Here's my summary of the key news overnight to keep you up-to-date over these holidays.
In a new national audit, China has discovered its local governments have debts of US$2.9 tln (NZ$3.5 tln), up 70% from three years ago. Total government debt in China is 'only' 58% of GDP, but two aspects are causing concern.
Firstly, this local government debt is growing fast - it was up 13% in the final six months of the audit to June 2013. And secondly, fully 20% of new debt is being raised to repay old debt - non-performing bad debt is growing fast.
In the US, the housing market growth is tailing off. November data showed little volume gains, and median prices at US$197,300 (NZ$240,600). Growth was strongest in the South and the West, but indexes slipped lower in the East and Mid-West.
Global prices for reinsurance policies up for renewal early in 2014 are falling because of strong balance sheets, relatively low loss experiences and an oversupply of capital in the industry, according to a unit of Marsh & McLennan. Competition is heating up. Hopefully we see our local insurers passing on the effect in New Zealand.
UST 10 year benchmark yields have slipped slightly lower overnight and are now at 2.98%. Crude oil prices have fallen in new York, as has gold. Stocks look like they are trying to make a run at a new all-time high.
Our currency also looks like it is rising as the year ends. The NZ dollar starts today at 82.1 USc, 92.1 AUc, and the TWI is at 77.4.
This is in contrast to the sentiment for the Aussie. Not only are some heavyweights expecting it to fall to 80 USc, but they are also expecting the RBA to cut rates to 2%. 2014 could see quite a separation open up between currency and interest rates between Australia and New Zealand. The Aussies think we are getting 'uppity'.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
Enjoy your New Year parties. Be safe. (Back on Friday.)
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